Ireland travel technology survey 2016

In June this year we put together a list of more than 60 companies doing travel technology in Ireland, a mix of homegrown startups and foreign direct investment.

This article, originally posted in Tnooz, provides a platform for a somewhat deeper discussion of why travel is such an important sector for Irish technology companies and gives us a chance to provide some views on the history and current state of travel technology here in Ireland.

Travel technology in Ireland stretches back many decades. To this day, Aer Lingus is one of the few carriers still operating its reservation system, “Astral”, started on an IPARS System/360 mainframe first installed by IBM in the late ’60s.

“Aer Lingus, although a small airline, was particularly strong at developing and selling its ASTRAL Res/DCS to many hosted airlines, ground handlers, and res/distribution agencies from the 1970’s through to circa 2002,” Kevin Pryor, Joint MD of Liberator.aero recalls. “Airlines that used it include Kuwait, Air Malta, Cyprus Airways, Air Zimbabwe, Egyptair, Hamburg Airways, Icelandair, and Bangkok Airways.”

In 1971, Aer Lingus spun out Cara Computing to provide airline technology services. At that stage, Ireland was already exporting travel technology and services to the wider airline industry.

While this was happening the airline industry used either proprietary networks or the SITA network to communicate between airlines, airports, agencies, and global distribution systems (GDSs).

In Ireland, Wescan Europe Limited (a division of Westinghouse Canada), was set up in 1980 to make airline network and terminal equipment. Datalex was founded five years later by Neil Wilson and Steve Metzler, focusing initially on airline computer network devices and software.

In the early years, they attracted a number of key people from Wescan including their current CEO Aidan Brogan, and also John McQuillan and John Lambe, who along with Sean Mac Roibeard went on to found OpenJaw Technologies in 2002. Former Datalex employees Dave O’Flanagan, Alan Giles, and Dermot O’Connor went on to found Boxever in 2011.

SITA – having grown beyond networks into airport and airline PSS systems – made a major investment in Ireland in 2003 with the acquisition of Eland Technologies.

Eland co-founder, Bobby Healy, went on to play a key role in CarTrawler, the company founded by brothers Niall and Greg Turley in 2004. (CarTrawler is one of the largest companies in ground transportation, known for airline integration of car rental, and more recently airport transfers.)

The next year SITA founded Aviareto – who manage the international airline registry – in partnership with the Irish government. SITA still have a major development centre in Letterkenny.

Another key part of the airline eco-system in Ireland is the aircraft leasing industry, sparked by Guinness Peat Aviation (GPA) in the 1970’s, described below. The founder of GPA, Tony Ryan, would eventually go on to co-found Ryanair and establish a startup hub at the Ryan Academy.

Later, his son Declan founded Irelandia Aviation, itself responsible for establishing and developing low-cost carriers all over the world, including Allegiant Air, Tiger Airways, VivaAerobus, and Viva Columbia.

Declan contributes back to the wider entrepreneurial environment in Dublin with funding to Frontline Ventures and some personal investing, such as Coindrum.

Back on the ground, accommodation technology is also a thriving industry in Ireland. The star of Irish startups is probably Hostelworld, founded by Ray Nolan and Tom Kennedy in 1999 and set for a major IPO 9 years later.

Ray subsequently acted as Chairman in Skyscanner and Tom went on to found Homestay, bringing several Hostelworld people with him. Tom also invested in MeetingsBooker. Another Hostelworld (and Ryanair) alumni, Santina Doherty, is the co-founder of Unravel Analytics.

Leasing Market

Today, aviation leasing in Ireland accounts for one in five passenger planes globally or approximately half of the world’s leased aircraft. Of the 15 biggest aircraft lessors in the world, 14 have operations in Ireland.

According to Boeing, the number of aircraft flying which are leased has grown from 2% (1980) to 40% (2014). Leasing aircraft allows airlines to manage the capital risk from operations from seasonal or macroeconomic factors — whether a small, growing airline or a flag-carrier getting ready for a busy summer season.

Following the 1970’s oil price shock, an Aer Lingus manager, Tony Ryan, began leasing aircraft and in 1974, with funds from Aer Lingus and the Guinness Peat investment bank, set up Guinness Peat Aviation (GPA). GPA went on to become the largest aircraft leasing company in the world at one point, and its valuation reached $4Bn at peak.

A decision to float shortly after the Gulf War in the early 1990’s proved fatal. To save the company, they sold assets to GE Capital Aviation Services, including aircraft, transfer of staff and options on shares.

The team and skills built in GPA are now part of the management teams of other leasing companies [GECAS, CIT, AerCap (ILFC, Genesis Lease, GPA), Pembroke Capital, International Aircraft Management Group, Babcock & Brown and Aircastle].

This talent pool, along with tax incentives, is what is attractive to this sector, with over $120Bn of funds under management in Ireland.

Government / Infrastructure

A number of NGOs, semi-state bodies, and government departments exist to support technology and investment in Ireland, the two largest being IDA Ireland, promoting foreign direct investment, and Enterprise Ireland, which supports development and growth of Irish businesses in global markets.

The IDA attracts companies such as Airbnb to Ireland while Enterprise Ireland provides funding and a network of market advisors in overseas offices to assist export-led companies (whether startup or established businesses).

A committed EU member, with a largely English-speaking and university-educated population, Ireland has attracted more than 1,200 foreign companies. These include Accenture, Adara, Adobe, AirBnB, Allianz, Apple, CA, Dell, Dropbox, Ericsson, Facebook, Fujitsu, GM, Google, Hertz, HP, IBM, Intel, Logitech, Oracle, PayPal, Philips, Radisson, Sage, SAP, Siemens, SITA, Starwood, Sun, Symantec, and Xerox.

In IBM’s 2015 Global Locations Trends report, Ireland is ranked as number one on the FDI Value scale for value of the jobs created through foreign direct investment:

“For the fourth year in a row, Ireland is the top ranking country in the world on this measure. It continues to attract investment projects in industries characterized by high knowledge intensity and economic value added, such as life sciences and information and communication technology (ICT).”

Ten accelerators and 30 university-based collaboration labs provide the assistance necessary for some startups.

Verticals

While preparing an exhaustive list of travel-related technology based in Ireland, we found a number of different categories emerging.

In airline IT and distribution technologies, Ireland is home to Datalex, which lists clients like Delta, Virgin Atlantic, JetBlue and Aer Lingus. OpenJaw Technologies was originally founded in Dublin, with British Airways, S7 Airlines, Cathay Pacific among its clients. Datalex is publicly-traded; OpenJaw was recently acquired by TravelSky.

Software companies with a presence in Ireland that help lessen the load for airline/airport operations include PlanitasLiberator and security software company Daon.

In mobile software development, Pulsate and FeedHenry (Redhat Mobile) have an interesting client list in travel. Dublin was also the starting point for Mobile Travel Technologies (MTT, now part of Travelport), which works with Odigeo, BCD, and Easyjet.

Big data and analytics companies founded in Ireland include Boxever and Phocuswright award winner UnravelAdara also has an office based in Dublin.

Ireland is also a hub for inflight content and technology. Retail inMotion was founded here, which transformed inflight sales (now part of LSG Sky Chefs).

Many of the inflight movies we watch on more than 50 airlines around the world are supplied and licensed by Inflight Dublin, and Arconics provide a range of inflight software used by crew and passengers alike on planes globally.

The Irish Financial Services Centre, situated on the opposite side of the river from the “Silicon Docks”, attracts financial services companies like credit card payment service providers (PSPs), including First Data (now owned by Mastercard).

Dublin was where Realex Payments started, with airlines like Aer Lingus and Virgin Atlantic among its ecommerce clients.

In County Kerry, on the opposite side of the country, are three of the industry’s biggest dynamic currency conversion (DCC) providers: Continuum Commerce, Fexco and Monex Financial Services. DCC, by all accounts an Irish invention, allows airlines, retailers, and travel companies to offer payment in the card holder’s currency rather than the local currency or the pricing currency.

Essentially the airline and DCC partner compete with the card issuer for currency conversion and a share of the commission.

Mobacar, the car rental, and local transport aggregator, was Phocuswright European Travel Innovator of the Year 2014. Another Phocuswright award winning startup is the transport technology company Indigo.gt.

Accommodation technology companies Netaffinity and Avvio are based here. Destination content companies TripAdvisor and Lonely Planet also have offices here. Recently, Acteavo joined forces with Treksoft to open their first office outside Switzerland.

Startups in Ireland

Starting a business is a challenge — in the travel industry, doubly so. That said, Ray Nolan (Hostelworld founder), speaking at Dublin TravelMassive, said that there’s still a lot of opportunity in travel software.

While hard to quantify, Dublin has access to networks of travel entrepreneurs at every level, all eager to help build the next big thing.

Ireland is similar to the UK in that it is quite simple to form and operate a company, relative to requirements facing budding entrepreneurs in continental Europe. “Red tape” and corruption here is low by most indices.

Travel and transport-related companies such as Indigo.gt, Boxever, Dropcar, and iCabbi have all been through the NDRC acceleration programme. Venture capital is close by, where individual investors take the lead in supporting travel technology companies.

However, the London and European investment markets are only an hour away for Dublin-based companies. Funds from further afield, such as Polaris in Boston, have helped entrepreneurs to scale.

The state agency, Enterprise Ireland, provides some different supports both for startups and scaling established business with a goal of growing Ireland’s export-based economy.

Networking is vibrant; meetups can easily fill every evening with interesting opportunities to meet potential collaborators and partners.

We run the TravelMassive group in Dublin, which has a strong slant towards travel technology. Tnooz ran a hackathon in the city in 2015, for instance.

We see companies starting, as well as companies scaling to trade sales — such as CarTrawler — or floatation — such as Datalex. There’s no shortage of inspiration or ambition.

Given our island geography and the long history of emigration, it probably isn’t surprising that Ireland has such a strong focus on travel and transport. Ryanair, Europe’s largest airline and 6th in the world by passengers, started here and is headquartered in Dublin.

In the first six months of this year, Dublin airport handled 13 million passengers, even though Ireland only has a population of 4.5 million. As a nation, we love to fly.

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